Posted on Monday, January 13, 2014

The Wharton School of the University of Pennsylvania recently brought its flagship Lifelong Learning Tour to Mumbai for the first time. During the tour, Kartik Hosanagar, a tenured associate professor of internet commerce at the institute, discussed Indian tech entrepreneurship and venture capital.

The presentation focussed on the current state and future potential of three Indian tech-enabled sectors — mobile, internet and software.

The talk was attended by about 45 people holding senior positions across industries including management consulting firms, healthcare companies, law firms, etc.

Hosanagar began with whether Indian start-up companies are merely replicating models that have been successful abroad or whether innovations are being made to adapt these models to the Indian market. Through examples of companies which took time to identify the specific product that they should be offering, Hosanagar elaborated on how crucial it is for start-ups as well as venture capitalists to enter the market at the right time to be able to gain sufficient returns.

According to him, one pattern that a lot of these companies follow is that they look at a fundamental shift that is happening in the market. They identify a need based on this shift and build something innovative. As a result, it takes a long time to market the product. These companies change their business plans and dimensions and they tend to be innovative and offer products that haven’t existed in the market before.

He asserted that India is an exciting place where numbers change every six months thanks to the fast growing internet and mobile markets. However, in spite of this, the market has not reached its peak with a number of issues such as broadband, 3G and 4G connectivity, and the sluggish performance of the manufacturing sector. Thus, certain businesses that could work elsewhere in the world are not feasible in India. Companies need to rethink the value chain and fix all the problems therein to overcome hurdles and achieve success. The view that entrepreneurs need to observe success in mature markets and replicate it in India; that fewer pivots would be needed for such models and no new discovery is important; that idea is not important, execution is; and that such a model would significantly de-risk investors is not sensible. Start-ups need to look at models overseas and re-imagine them for India.